Hikal Ltd., a preferred long-term partner for leading global life sciences companies, has shown a Q1 FY23 revenue degrowth of 17% to reach Rs. 379 crore.

Pharmaceutical sales de-grew 18% YoY and stood at Rs. 224 crore as compared to Rs. 274 crore in Q1 FY22. This de-growth is predominantly due to channel inventory correction at customers’ end. Orders received for intermediates for a COVID drug from a global innovator company and increased penetration in Latin America and Middle East market for the API Generics business. 

Crop Protection sales de-grew by 15% at Rs. 154 crore as compared to Rs. 183 crore in Q1 FY22. This de-growth is predominantly due to disruption in operations at Taloja. Construction of a new multipurpose plant is on-track at Panoli and expected to be commissioned in the second half of FY23.

Commenting on the results, Jai Hiremath, Executive Chairman, Hikal Ltd. said, “We had a challenging quarter where we witnessed significant headwinds in both our businesses. Our Pharmaceutical business witnessed a de-growth of 18% and revenue stood at Rs. 224 crore in Q1 FY23, predominantly due to channel inventory correction at customers’ end. Additionally, this quarter we experienced margin pressure on account of higher input costs which have started easing out and a positive impact on margins is expected to be visible in the coming quarters. We expect the demand for our own products business to improve in the coming quarters. We continued to receive several new inquiries from global innovator companies for the partnerships in the CDMO business segment and successfully secured a few projects from global innovators, which have a potential to turn into significant incremental revenues in the coming years. We have a healthy pipeline of new products and are confident of capitalizing on our product mix going forward."

"In the Crop Protection business, revenue stood at Rs. 154 crore in Q1 FY23. Due to disruption in operations of our Taloja plant we lost production capacity for a significant part of the quarter. However, we utilized the time effectively by undertaking our annual preventive maintenance. Our plant is now fully operational, and our operations team is committed to make up the production loss to the best extent, over the next three quarters. We are on track for building our new multipurpose plant for launching new products, which is expected to come on stream by the end of this financial year. On the CDMO front, we continue to receive numerous new inquiries from both existing and new customers. We are working on several new products for global innovator companies. With the demand remaining robust in the market, we are very positive towards our growth story in the Crop Protection business," commented Hiremath. 

"Considering the uncertainties prevalent in the macro environment, most global companies are looking for supply chain diversification (China-plus-one strategy). We are witnessing numerous inquiries from potential collaborations, and we are well positioned to capture the influx of opportunities. In addition, we are also seeing significant traction in our emerging Animal Health business with enhanced inquiries. As part of our 10-year multi-product project with a global innovator, process development of several active ingredients is on-track, and a dedicated asset for Animal health business is under way which is expected to be commissioned by end of FY23," added Hiremath.